Stats SA confirms unemployment rate decline

Amid something of a furore over the news of a decline in South Africa’s unemployment rate to 21,9%, Statistics South Africa said on Thursday during a briefing at Cosatu House that the lower rate is statistically correct.

This came after conducting an internal quality check, but does not mean jobs were created in high-paying areas, or growth engines, of the economy.

A number of commentators were highly critical of the fourth quarter labour force survey (QLFS) result of a decline in unemployment from 23,2% and an addition of 189 000 jobs at a time when GDP growth was reported at – 1,9%.

Rudi Dicks, executive director of the National Labour and Economic Development Institute (Naledi), who hosted the briefing, said the one concern was the disparity between GDP and the jobs report, while the other was how redefining what a discouraged work seeker is enabled a drop in the figure.

“We understand that this continues to be a high number, so is this political football?” asked Dicks.

Another area of concern mentioned by the floor was the fact that Stats SA uses international guidelines to use a one-hour criterion to determine if someone was employed during a week, a factor seen as possibly artificially inflating the numbers.

Yandiswa Mpetsheni, executive manager of Household Labour Market Statistics at Stats SA, responded by drawing up a comparison between the QLFS, the Quarterly Employment Statistics (QES) and GDP data in the fourth quarter.

She noted that it was only construction growth of 8% (89 000 jobs), 0,9% and 0,4% across the three data sets respectively that was statistically significant. She noted that manufacturing at -3,5% of GDP was the key negative, while the QLFS showed growth of 1,2%, while the QES showed -1,5%.

But she said the QLFS increase was “not significant on the scale of things” and explained that the highest number of jobs at 16 000 was in the Eastern Cape, but that this was not an economic growth engine as Gauteng, KwaZulu- Natal and the Western Cape contribute 64% to GDP.

However, Gauteng saw — 4 000 jobs and KwaZulu-Natal and the Western Cape saw only marginal increases of 3 000 apiece.

“Manufacturing in the QLFS includes formal and informal workers-so don’t just look at the bigger producers like cars or machinery, but think informal sector where you have a worker in KwaZulu-Natal making necklaces using beads or someone turning fruit into jam,” she explained.

Instead, the major sector that added to jobs was the government sector, and Mpetsheni noted that two-thirds of the 189 000 new jobs were elementary jobs, also known as unskilled labour.

She concedes that Stats SA needs to do more to educate users and will endeavour to do so, with this event being one such attempt.

She explains that methodological differences need to be understood or unpacked by analysts when interpreting the data.

She notes that while the QLFS is done on a continuous basis during the quarter, the QES is done at the end of the last month of the quarter.

This will mean, for instance, that come December for Q4 data, the QLFS will already have two-thirds of the data and won’t reflect any new changes, which the QES will reflect thanks to using end December payrolls.
“Dealing with households is a different ballgame,” she says.

On the one-hour concern, she said that any activity for gain must be measured, but the quality of the job is something else to be looked at.

“If you only sell two apples today, you are still employed,” she said.

She said that the nature of the informal sector reflected these rapid shifts, but that did not mean people here should be seen as being unemployed.

On the discouraged job seeker issue, she said that it was important to note that inactive workers are excluded from the key labour force denominator, which then gives the unemployment rate.

Discouraged work seekers were shown to have increased in the fourth quarter to 1,168 million from 1,071 million.

Mpetsheni said this number was different to the old LFS, where it was around three million, as these workers were previously included here if they were available for work.

However, now they asked respondents if they wanted to work in the previous week.

Naledi is an independent research initiative sponsored by Congress of South African Trade Unions (Cosatu). — I-Net Bridge

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